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Here’s how Tesla’s meme-stock nirvana might end

April 17, 2021

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Today's Agenda

Tesla Meets Its Bobcat

A weird thing about many of the meme investments we love these days is just how replaceable they are. GameStop sells video games online, not a rare skill. Bitcoin can be replaced by many other coins, including Dogecoin, a joke investment now worth $50 billion. Is Dogecoin a store of value? What is value? What is life? One minute you're walking brownies to the car, the next you're yeeting a bobcat. (Trigger warning for cursing and man-on-bobcat violence.) 

Then there's Tesla, which trades at infinity times earnings because it's the current world leader in making cool cars that run on batteries. But you know who else makes cool cars and is quickly learning how to make them run on batteries? Lots of people, that's who, including the Germans. Volkswagen is pretty good at it, lame jokes or no. Then there's Mercedes-Benz, which will soon be the name of the automaker formerly known as Daimler. The name change heralds an electrified new era for the company, writes Chris Bryant. It also hints at a plan to cover the transition costs by charging ludicrous prices for irresistible, high-functioning electric cars. It's a real threat to Tesla.  

President Joe Biden's infrastructure plan gives people money to buy EVs, which Liam Denning has written will only further encourage Tesla competitors. But EV adoption will never really take off if people worry about having enough places to plug in, writes Anjani Trivedi. She suggests we emulate China, which is skipping the consumer incentive thing and first building a proper grid and charging network.

Grids and charging networks, alas, don't grow on trees. Corporate America, which our sources inform us is the sworn enemy of capitalism, this week demanded faster action on slashing carbon emissions, Liam Denning notes. You would think, given the business community's deep Marxist leanings, it would be eager to pay higher taxes to help pay for this. You would be wrong. Something has to give here. Something, be it the climate or the bobcat, always does. 

Biden Informs Russia He Will Turn This Car Right Around

The big news from President Joe Biden's White House today was its decision to say "sure, why not" to Donald Trump and Stephen Miller's severely low cap on the number of refugees allowed into the country. It shocked partly because Biden has otherwise spent most of his time in office expunging Trump's policies from the record. One of those was to be weirdly forgiving of Russia and Vladimir Putin, no matter how much they interfered with our elections or expelled our diplomats or killed dissidents or annexed Crimea. Biden's new round of sanctions over the SolarWinds hack and (yet more) election interference signals to Putin once and for all that when we say stop it, we mean stop it, young man, Bloomberg's editorial board writes. Biden did leave the door ajar for rapprochement. At the same time, Russia has shown little inclination to go through that door, meaning we'll still need to strengthen our defenses against its shenanigans.

Bonus Editorial: Biden's Afghanistan pullout is necessary but risky. He must press the Taliban and neighbors for a real peace. 

China's Vaccines Are Fine, Actually

Going it alone on vaccines isn't working out so great for China. Tests show its homemade vaccine isn't nearly as effective at stopping Covid-19 as most others on the market. It could help explain why cases are surging in Chile, despite it doing such a great job delivering jabs. China's vaccine diplomacy means many developing economies are relying on these shots. But Clara Ferreira Marques warns the world against despairing or yeeting the shots like so many bobcats. They're still very effective at stopping severe disease, which is what these countries need to avoid breaking their rickety health-care systems.

Further China Reading: China's recent growth spurt was driven by exports to a stimulated America, turning an old narrative on its head. — Dan Moss 

Telltale Charts

America's factory sector is in a weird transition phase, but the future boom times are just starting to show up in the data, writes Brooke Sutherland.

Morgan Stanley's $911 million Archegos loss came at just the right time and, despite its numerical cue, does not constitute an emergency, writes Brian Chappatta. 

Further Reading

The executive-branch appointment process is far too slow and involves too much vetting. — Jonathan Bernstein 

Biden's Supreme Court commission is designed to kill the court-packing idea because he knows it's a political dud. — Ramesh Ponnuru 

Germany's Supreme Court ruling on Berlin rent controls keeps the issue alive, which is bad news. — Andreas Kluth 

Canceling youth sports is hurting kids and doing nothing to stop the pandemic. — Adam Minter 

America would be better off if more people owned and used RVs. — Frank Barry 

ICYMI

The U.S. hit 200 million vaccinations.

Republicans who voted to impeach Trump are flooded with donations.

Raul Castro is stepping down in Cuba.

Kickers

New ocean menace: biting sea worms. (h/t Alistair Lowe) 

Space X wins NASA contract to build a lunar lander.

"Whitest ever" paint reflects 98% of sunlight.

Why won't George R.R. Martin finish "Winds of Winter"?

Notes: Please send white paint and complaints to Mark Gongloff at mgongloff1@bloomberg.net.

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